The Impact of Pollution on Worker Productivity

Joshua S. Graff Zivin, Matthew J. Neidell

NBER Working Paper No. 17004
Issued in April 2011
NBER Program(s):Environment and Energy Economics, Health Economics, Labor Studies, Productivity, Innovation, and Entrepreneurship

Environmental protection is typically cast as a tax on the labor market and the economy in general. Since a large body of evidence links pollution with poor health, and health is an important part of human capital, efforts to reduce pollution could plausibly be viewed as an investment in human capital and thus a tool for promoting economic growth. While a handful of studies have documented the impacts of pollution on labor supply, this paper is the first to rigorously assess the less visible but likely more pervasive impacts on worker productivity. In particular, we exploit a novel panel dataset of daily farm worker output as recorded under piece rate contracts merged with data on environmental conditions to relate the plausibly exogenous daily variations in ozone with worker productivity. We find robust evidence that ozone levels well below federal air quality standards have a significant impact on productivity: a 10 ppb decrease in ozone concentrations increases worker productivity by 4.2 percent.

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Document Object Identifier (DOI): 10.3386/w17004

Published: Graff Zivin, Joshua and Matthew Neidell. “The impact of pollution on worker productivity,” American Economic Review, 102(7): 2012. citation courtesy of

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